Reference no: EM132739400
An organization began the year with the following balances in their accounts:
Cash $ 20,000
Accounts Receivable, Net 36,000
Pledges Receivable 300,000
Inventory 20,000
Property, Plant, and Equipment, Net 450,000
Accounts Payable 35,000
Notes Payable 220,000
Wages Payable 34,000
Net Assets with Donor Restrictions 177,000
Net Assets without Donor Restrictions 360,000
The organization uses straight-line depreciation method and assumes a 10% salvage value at the end of the life cycle. They use Last In First Out (LIFO) system of inventory management.
The foundation had the following financial events during the current year:
1. February 16. Placed an order for new furniture for $20,000. They have not yet made the payment, and the furniture has not been delivered yet.
2. May 26. Cut a check for $10,000 towards the deposit for the furniture ordered on February 16th.
3. September 30. Assume they began the year with 200 boxes of inventory, each at a cost of $100 (this is already reflected in the starting balance). They purchased an additional 220 boxes at a cost of $140 each. They sold 400 boxes for $150 each.
4. October 7. The furniture ordered on February 16 arrived, and they paid for the balance owed.
5. November 14. Borrowed $80,000 from the local bank on a note payable.
6. December 4. Repaid $30,000 on the note payable and also $3,000 in interest expenses.
Problem 1: How would record transactions in a Transaction Worksheet or show the effects on the fundamental equation of accounting?